A Closer Look at "The Phony Education Funding Crisis"

The conservative Hoover Institute publishes, by far, the best magazine -- Education Next -- linking news and research on education in ways that are engaging and informative for non-PhD's.  In many ways, it's a model for what other groups should be doing.  Most teachers, principals, school board members, parents, etc. will never pick up a copy of one of the top academic journals and read through the lengthy and technical pieces inside.  Education Next, however, contains shortened versions of academic articles in addition to commentaries, book reviews, and other features that just about anybody can pick up and read without too much effort.  But, as with all think-tank publications, sometimes the articles merit a closer look.

One such article was published this week.  Entitled "The Phony Education Funding Crisis," it attempts to show that journalists consistently portray schools as underfunded and understaffed while, in actuality, school funding and staffing levels have risen almost interminably.  In some ways the claims are irrefutable, but the arguments advanced deserve further scrutiny -- and I'm just the person for the job.

Why?  Because I was originally part of the research team working on this article.  I helped decide which newspapers to search in which years, which keywords to use, and how to code each article as portraying schools as in need of more funding, spending too much money, or somewhere in between.  That was about a year and a half ago, and I moved on to a different project before analysis got underway.

The article begins with the following statement:

"Chicken Little is alive and seemingly employed as a finance analyst or reporter for an education interest group. If one relies on newspaper headlines for education funding information, one might conclude that America’s schools suffer from a perpetual fiscal crisis, every year perched precariously on the brink of financial ruin, never knowing whether there will be sufficient funding to continue operating . . . "

I continued reading, eager to find the results of the empirical analysis of newspaper content over the past three decades.  But that was the only mention of the content.  Apparently the analysis was scrapped at some point in the last 18 months or so.  The lack of empirical evidence to back up the claim made in the first paragraph significantly weakens the article, but the bulk of it discusses unrelated matter.  More specifically, the article is mostly focused on the rise in school funding and employment levels in the nation and figuring why this is the case.

The authors' analysis of why funding and employment levels increase in the way they do is, in my opinion, pretty much spot-on.  Among other things, they point out that education is privileged by many local and state legislatures, that many policy folk prefer to cut funds from other programs rather than schools, and that school employees are well-organized.  I'd add that a major source of school funds -- property taxes -- tends to change more slowly than other revenue sources, and rarely decreases.  For the most part, I think they're correct to say that school funding and employment levels have increased quite a bit over the past few decades and I think their explanations for this phenomenon make sense.

But I take issue with three pieces of data that are presented:

1.)  They mention a significant rise in teacher salaries.  But these salaries, measured in constant dollars, seem to have barely budged over the past 35 or so years.  If you look at an extended version of the chart in the article, you can see that teachers are now paid only a couple thousand dollars or so more than what they were paid in the early 70's.  The drastic increase in the number of employees, on the other hand, is striking.

2.) School funding hasn't skyrocketed by every measure imaginable.  If we look at per-pupil funding relative to per capita GDP, we find that spending has declined over the past quarter-century.  Which is not to say that it should or shouldn't have fallen, just that it has.

3.) The authors write that "reading scores on the National Assessment of Educational Progress (NAEP) have been level for four decades" as a justification for their argument that we've gained nothing by increasing funding and employment levels.  On face, this is true -- reading scores have barely risen.  Younger students' math scores, however, have increased dramatically.

More importantly, I take issue with the interpretation of the data that are presented.

Proving that funding has increased -- and explaining why -- doesn't answer whether or not it should.  The article seems to imply that increased funding is inevitably a waste of money, which may or may not be true.

We can imagine a number of reasons why the same education might cost more today than it used to.  Four decades ago, the teaching force consisted mostly of women who were near the top of their college class.  For many of the highest achieving women, education was the only real career option.  Nowadays, however, education is one of the last choices for many of the top achieving college students -- of both genders.  So it might make sense that teacher salaries should rise dramatically (which they haven't) in order to attract equally talented teachers.  Or, if we're going to settle for less talented teachers, maybe it makes sense that we would hire so many more of them to teach kids in smaller classes and so many more staff members to support them.

Similarly, it's not out of the realm of possibility that in other ways it also costs more money today to educate students to the same degree.  Even if we assume that students today are no better off than students forty years ago (a dangerous, and likely false assumption), that doesn't mean that increased funding hasn't had an effect.  What if students would be doing worse if not for the additional funding?  Maybe the increase in divorce means that we have more emotionally fraught students who need smaller classes and more individual attention.  Or maybe the increase in technological distractions means that it's harder for students to focus on school.  I don't know if these, or any of a million other arguments one could make, are convincing -- but that's not really the point.  To establish causality, we need to know more than just which came first.  To say  that spending increased and achievement didn't does not prove that more spending doesn't yield greater achievement.

Then we have a heterogeneity problem.  That is, to say that schools are under- or over-funded across the country isn't really correct.  Some districts are awash in cash that they use to fund all sorts of interesting things.  Some districts are struggling to get by.  So this is a case where I think the utility of generalizing is extremely limited.

Last, and most importantly, the authors convincingly argue that local and state politicians will cut funding for virtually any other program before they'll cut it for schools.  So what's the problem here?  Value judgments are, to some extent, in the eye of the beholder, but this one is pretty clear to me.  That school funding is about the last thing that anybody wants to cut is a good thing.  We should cut other programs before we cut back on schools.

To sum up: Do the news media claim there's a school funding crisis more than they claim that property taxes and such are too high?  I don't know.  Is there, in fact, a funding crisis?  It depends where you look and how much money you think schools need.  Has school funding increased over the past half-century?  Yes . . . well, depending on how you measure it.  Is this a bad thing?  Maybe, but not necessarily.  Do school expenditures shrink less than others when the economy shrinks?  Yes.  Is this a bad thing?  Probably not.